The Financial Express

Fast-tracking work for old-age pension scheme 

| Updated: April 15, 2022 22:12:54

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In line with 2008's election pledge of the ruling party, the government presented the outline of a Universal Pension Scheme (UPS) to the media two months back. Now as directed by the prime minister, according to the Monday issue of The Financial Express (TFE), the finance division under the finance ministry has fast-tracked the work to form the body, styled, National Pension Authority (NPA), to operate the UPS. To go by the same TFE report, the phase of gathering public opinion on the draft act to operate the UPS as envisaged should also be over by now. The finance division is reportedly expecting to place the draft act on the said UPS during the next budget session of the JS for its passage. Unquestionably, this is a welcome development to meet a long-felt need of the people. For unlike the government employees, those working in the private sector are in most cases not covered by any post-retirement benefits such as a pension scheme. And seeing that the average life expectancy in Bangladesh has meanwhile risen to 73 years, the question that arises is how these people are going to sustain themselves in their old age.  

Since many developing countries including neighbouring India have provisions like pension schemes to financially support all their senior citizens, there is no reason why Bangladesh should lag behind. True, there is the provision of 'old age allowance, for the vulnerable senior citizens under the so-called Social Safety Net Programme (SSN). But that is not enough considering the emerging reality that senior citizens of the country will be constituting 20 per cent of the population by 2031, according to the Bangladesh Bureau of Statistics (BBS). 

Moreover, the justification for having such a state-level financial support programme for the ageing population has become more pronounced as the country is to become a Middle Income Country (MIC) by 2031. As such, it is only befitting that the nation should have such an old age support programme in place within the shortest possible time. The good news is that the government body entrusted with preparing the UPS has in the meantime come up with some basic features of the UPS for public consumption. For example, any Bangladeshi citizen aged between 18 and 50 will be eligible for the scheme. For each beneficiary, a separate pension account will be created. The eligible beneficiary of the proposed UPS will then be required to contribute to the scheme a prescribed amount of monthly subscription and so on. At this point, the government would do well to seriously think of enrolling in the scheme also those senior citizens who are above 50 years of age. 

 Now comes the issue of successfully running the ambitious UPS under consideration. The government's portion of the UPS fund is learnt to be arranged in the shape of grant. Given the government's existing fiscal limitations, revenue collection constraints and, especially, the burden of financing a number of large infrastructural projects, the need for exercising extreme caution on the issue need not be overemphasised. Then comes the issue of corruption-free management of the huge sum of fund involved under the UPS. It is good to know on this score that a 15-member governing body is in the process of being formed for the purpose. Hopefully, taking a cue from the good practices in other countries, the government will soon be able to present the nation with its long-awaited old-age pension scheme. 

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